German Leader Bets on Innovation for Future Growth

Daimler AG (ETR: DAI) increased its total revenue in 2016 by 3 percent, earning €153.3 billion (US$165.8 billion) by the end of the year. The company’s EBIT fell by 2 percent ending at €12.9 billion (US$13.9 billion) but its net profit grew 1 percent ending in €8.8 billion (US$9.5 billion).

Daimler’s success was driven by a 5 percent increase in unit sales, which ended at 2.998 million. The growth was led by stronger demand of Mercedes-Benz Cars and Mercedes-Benz Vans. The former grew by 10 percent compared to 2015 resulting in 2.19 million sold units, while the latter represented 359,096 sold vehicles and a 12 percent growth in that same period. The Daimler Trucks and Buses divisions, however, showed contraction signs after falling in sales by 17 and 7 percent, respectively.

Overall, Mercedes-Benz Cars was the biggest contributor to the company’s EBIT with €8.1 billion (US$8.7 billion) although Mercedes-Benz Vans was the division that showed the most improvement at 33 percent. Growth was achieved despite expenses related to Takata’s airbag equipment which represented €480 million (US$519 million) and €83 million (US$89.8 million) for each of these divisions.

In terms of R&D expenditure, the company increased its investment by 15 percent compared to 2015 with a total of €7.6 billion (US$8.2 billion). According to Bodo Uebber, Member of the Board of Management at Daimler AG for Finance & Controlling and Daimler Financial Services, the company plans to invest €16 billion (US$17.3 billion) in R&D projects in 2017 and 2018.

“Those who wish to shape the future of the automobile at the forefront of the automotive industry need both financial strength and innovative skill. In 2016, we demonstrated that the combination of these two factors at Daimler is stronger now than ever before,” said Dieter Zetsche, Chairman of the Board of Management at Daimler AG and Head of Mercedes-Benz Cars at the company’s annual press conference in Stuttgart.

“As the inventor of the automobile, we aim to play a leading role in shaping the mobility of the future. In this context, we are increasingly focusing on the strategic areas of the future of digitization and electrification,” added Uebber.

Find out more about Daimler AG by ordering your copy of Mexico Automotive Review 2016 and reading our interview with President and Director General of Mercedes-Benz México, Radek Jelinek.